Kalytera Therapeutics, Inc. (TSX VENTURE: KLY and OTCQB: KALTF) announced that it has signed a Letter of Intent to acquire Stero Biotechs, Ltd. Stero is a privately held Israeli company that is developing cannabidiol for co-administration with steroids, so that the effective dosages of steroids can be significantly reduced, thereby potentially avoiding or reducing the many safety issues relating to steroid administration. Closing of the transaction is subject to shareholder approval and other conditions, as explained below.
Stero Biotechs aims to address unmet medical needs through the use of CBD, a non-psychotropic component of cannabis sativa, which has been shown to possess potent immuno-modulatory and anti-inflammatory properties in various indications. Stero’s clinical data demonstrate that CBD administration enhances the therapeutic effect of steroids, and may permit reduced steroid dosages, while maintaining or improving the original therapeutic effects of such steroids.
Kalytera Therapeutics, Inc. is pioneering the development of a next generation of cannabinoid therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of novel cannabinoid medicines for a range of important unmet medical needs, with an initial focus on graft versus host disease.
Importance of this Acquisition
Kalytera and Stero are similar, in that each company is developing CBD pharmaceutical products. However, Stero’s CBD programs address many more, and much larger commercial markets than do Kalytera’s programs. For example, Kalytera has issued patents for the use of CBD in prevention and treatment of graft versus host disease (“GVHD”), which is an orphan disease. Stero, on the other hand, has issued patents covering the use of CBD for steroid sparing in over 130 different diseases and disorders, which, in the aggregate, represent a multi-billion dollar commercial opportunity. The addition of Stero’s portfolio of CBD pharmaceutical programs to Kalytera would position Kalytera among the leaders in CBD pharmaceutical development.
Stero’s Ongoing Phase 2 Programs in Steroid Sparing
Stero currently has two ongoing Phase 2a clinical studies evaluating CBD in steroid sparing, and has data from earlier clinical studies demonstrating that co-administration of CBD with steroids may significantly reduce the need for steroid treatment, with the potential to reduce steroid dosing by as much as 80%.
Steroids are used in treatment of more than 130 diseases and disorders. However, steroids carry an array of potential side effects, such as fluid retention, bone damage, elevated blood sugars, and problems with mood, memory, and mania. In some clinical situations, the risks of steroids outweigh the benefits of the treatment, particularly when high doses are required for a prolonged period of time. For this reason, many physicians are focusing on “steroid-sparing” treatments, to help minimize these effects.
Acquisition will Position Kalytera as a Leader in CBD Pharmaceutical Development
“With the acquisition of Stero, Kalytera will be positioned as a leader in the development of CBD pharmaceuticals, with our current program in prevention and treatment of GVHD, and with multiple additional programs in steroid sparing,” stated Robert Farrell, President and CEO of Kalytera. “With more than 130 named diseases and disorders in which steroid treatment is indicated, our programs in steroid sparing will address a large commercial opportunity, much larger than the opportunity in GVHD. Stero has issued U.S. patents covering the use of CBD for steroid sparing in the 133 named diseases and disorders listed below.”
